This Risky Micro-Cap Could Pay Off Big

There are two kinds of risks in the stock market. The first is execution risk, which is the probability that the company whose stock you are buying will survive and thrive. And the second one is valuation risk. This is the risk that you are paying too much for your shares.

Many biotech companies have neither profits nor revenues, which makes this sector highly risky. When you buy a biotech stock, you are taking a risk that your company will fail to execute and the biotech's drugs will not receive approval from the U.S. Food and Drug Administration (FDA), or otherwise fail to make any money.

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Source Fool.com